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Have a Dana 300 that i modified the shift rails to give me 2wd low and twin sticked it. With it in 2wd low it will jump into neutral going down hill!! Seems to lock in good. The levers are not binding. I left all the detents in. What gives??
2 LO puts a little more stress on the case.
If you haven't opened your case in awhile I would say your shift collars are worn putting pressure on the shift fork.
Or, worn gears putting pressure on the collars.
If you had the case opened recently could be incorrect shimming at the front output. This would cause side load on the gears.
Make sure the shift rod clearance hole is not to small as it can kick the Transfer Case out of gear as things get to bounce around. I have had this happen to me.
I groved the rail in my Dana 20 while I had it apart for a 3:15 kit.
Like hole, I found no need to grove the rail while I had my Dana 300 apart for the 4.1 kit.